AUGUSTA — The Augusta Civic Center is expected to turn a profit for the second year in a row, a milestone that officials say shows the growing strength of the local economy as more people attend events and spend money there.
The city-owned convention center and auditorium will likely finish the current fiscal year with a profit of between $40,000 and $50,000, Earl Kingsbury, director of the civic center, told city councilors during a recent budget workshop.
That won’t match the $272,000 in profits the civic center brought in the previous year, but continues the recent trend of the facility running “in the black.”
That isn’t the case every year, as sometimes it loses money, including as recently as 2015, when expenses exceeded revenues by $120,000.
Kingsbury said the civic center is getting new business, having booked about a dozen new events this year, most of which have also re-booked for the following year. But that much of the income growth is due to an increase in the number of people coming to existing conventions and conferences, adding money to catering and related revenues, he said.
“The big thing now is we’re running some of the same events, but when you have a conference that may have had 400 attendees, people are more comfortable now, with the economy, spending money, so now we have 600 attendees at that conference,” Kingsbury said. “So that’s 200 more meals we’re serving on that particular day. You have that with 20 different conferences, that’s 4,000 more meals. So the revenues are up.”
City Manager William Bridgeo said the building has run at a loss for several years, forcing the city to subsidize its operations with cash “loans” from the general fund, which, in years in which it makes a profit, is paid back to the city’s general fund. The civic center has about 100 employees, of which dozen or so are full-time.
Bridgeo said the amount the civic center “owes” to the general fund from past year’s losses is currently about $300,000.
“When the great recession hit in 2008 and 2009, the civic center, for several years, took a big hit and operated in the red and was subsidized from the general fund with IOUs,” Bridgeo told city councilors last week. “And it has been, in the last couple-three years, through the hard work of Earl Kingsbury and his dedicated staff, that they’ve climbed out of the red, gently into the black. The balance sheets are beginning to show as favorable. Not extravagantly so, but at least we’re not any longer in the situation where there is a subsidization going on anymore.
“So, on an overall basis, I think we can feel good that our city has this asset and we run it well and people love it, and it does contribute to the vitality of businesses throughout the city.”
Bridgeo said it is common for municipally owned facilities like the civic center, built in 1973, to be subsidized every year. He said the Cross Insurance Center in Bangor, an 8,000-seat venue opened in 2013, is subsidized by the city of Bangor by thousands of dollars a year.
Bridgeo said municipalities often subsidize such buildings for the potential benefits they can bring, especially the positive financial impact on local businesses, as attendees at events spend money in the surrounding area.
“The whole idea of why the city owns and operates a civic center is to encourage private businesses in that area,” he said. “That’s why a government got into the business of a convention center instead of letting the private sector do it, 40 years ago. And that was so we could end up with something like the Marketplace at Augusta, which didn’t exist when the civic center was built. And the hotels and restaurants that feed the local economy.”
Ralph St. Pierre, finance director and assistant city manager, said about half the civic center’s revenues are from rentals of the building itself, and half are from catering and concessions.
In recent years the civic center has relied more heavily on conventions and conferences for income as it has lost concert business to newer, larger facilities, including the Cross Insurance Center in Bangor. However the Augusta facility does still host concerts, with shows coming up including country star Travis Tritt May 21 and classic rockers Marshall Tucker Band coming Sept. 23.
In next year’s proposed city budget, civic center revenues are projected to increase by about $49,000, a 1.81 percent increase, to $2.7 million. However, expenses are projected to increase by almost the same amount.
Within the city’s budget the civic center is considered, like Augusta State Airport and Hatch Hill Regional Landfill, an enterprise fund, intended to be self-supporting through user fees and charges.
Mayor David Rollins praised civic center staff for turning a profit at the building which includes more than 48,000 square feet of meeting space with 23 meeting rooms and a 24,576 square-foot main auditorium. He said it is a unique asset for Augusta.
“How many cities in New England of less than 20,000 people have a civic arena like this? I don’t think there are any,” Rollins said. “We’re working to be the best little city in New England. When you line up our assets, for a town this size, it’s quite remarkable. We’ve got our own airport, our own civic center … it’s amazing. Not just that we have it, but that it’s municipally-run. That’s something the community should be very proud of.”
Keith Edwards — 621-5647